Skip to main content

Value stocks getting harder to find

One of the things I do at Alert HQ is scan the Trend Leaders list for stocks that not over-valued. I use a simple screen to identify those stocks that, while trending strongly upward, are showing what I call "reasonable value."

Here are the criteria used for my reasonable value determination:
  • PE between 0 and 20
  • PEG between 0 and 1.3
  • Price-to-Sales less than 2
  • Debt-to-Equity less than 1
The following table shows the results of this screen after it was run against those stocks that were added to the Trend Leaders list after the close on Tuesday, March 16. The Last Price column is also as of the close on Tuesday.

Symbol Name Last Price Market Cap PE PEG Price To Sales Price To Book Debt To Equity
COP CONOCO PHILLIPS $52.17 $76.84B 15.81 0.59 0.56 1.22 0.431
GGAL Grupo Financiero Galicia S.A. $5.50 $661.7M 10.88 1.2 1.14 1.22 N/A
AIRM Air Methods Corporation $32.24 $389.7M 11.46 0.57 0.67 1.79 0.4601
HGG HHGREGG, INC. $22.50 $872.6M 19.11 1.17 0.59 3.6 0.3773
EME EMCOR GROUP, INC. $26.19 $1.668B 10.61 0.72 0.3 1.37 0.1234
ANDE The Andersons, Inc. $34.87 $625M 16.15 1.06 0.2 1.51 0.7582

Given the fact that there are over 900 stocks and ETFs on the Trend Leaders list this week, it is a sad comment for a value investor to see so few stocks pass this rather loose value screen.

Be that as it may, today's list does have some interesting selections. Here are a few comments:
  • Conoco Phillips (COP) is expected to sell half of its stake in Lukoil which could raise roughly $4.6B. The stock has been steadily advancing since the beginning of March. The PE is reasonable but PEG and Price to Sales are very low, indicating deep value.
  • Grupo Financiero Galicia S.A. (GGAL) is a good way to play the dynamic economy of Argentina. The company is a significant player in commercial banking and consumer banking in the country. The company has struggled to grow earnings over the last few quarters, as have so many financial companies, but they have remained solidly profitable.
  • Air Methods (AIRM) stock price has shot up recently and it threatens to close the bearish gap that occurred in late January after reporting poor earnings. The stock was beaten down so badly its PEG and Price to Sales numbers are now well within value territory. The company supplies medical air transport services. Management says expectations are high. Who knows, maybe the new health care bill will help them out.
  • hhgregg (HGG) operates retail electronics stores in nine states. Here is a company that is doing pretty well as you can see in this chart of company financials and below that the chart of price action:


  • Emcor Group (EME) is primarily involved in electrical distribution systems and HVAC equipment for commercial buildings and municipalities. The company's numbers show that it is still waiting for the construction industry to recover; however, a patient investor will probably be rewarded by this company.
  • The Andersons (ANDE) may have an unusual name but they are in the somewhat mundane businesses of grains, ethanol, railcars, fertilizer, warehousing, seeds and chemicals. In any case, this mix of businesses seems to be working for the company. Their most recent quarter showed solid sequential growth but our screen shows the company is not over-valued. Below is the chart which shows a beautifully steady upward trend:

Conclusion --

It may be getting harder to find value stocks that are showing good price performance but these six show that there are still a few out there. In digging into them, it looks some are better than others. My personal favorite from today's list is hhgregg but I do find The Andersons to be a pretty interesting company. And with its 50-DMA about to cross above the 200-DMA, there is probably further upside to be had.

Disclosure - no positions in any stocks mentioned in this article

Comments

Popular posts from this blog

Brazil - in a bubble or on a roll?

A couple of years ago, no one recognized the real estate bubble even though it was under everyone's nose. Now, analysts and bloggers are seeing bubbles everywhere they look. One of them, they say is in Brazil whose Bovespa stock market index has doubled in the last 12 months. Does the bubble accusation hold water? I don't think so and here are 7 reasons why Brazil is by no means a bubble economy: Exports have held up over the past year thanks to demand from China for Brazil's soya exports and iron ore. This was helped by the the Brazilian government's drive to improve trade links with Asia and Africa. Export diversification, spurred by a more active trade policy and increased focus on "south-south" trade under current president Lula, helped mitigate the decline in demand from OECD (Organization for Economic Co-operation and Development) countries A "sensible" economic framework has been in place since the 1990's. This has included inflation ...

Trade Radar gets another update

Some of our data sources changed again and it impacted our ability to load fundamental/financial data. In response, we are rolling out a new version of the software: 7.1.24 The data sourcing issues are fixed and some dead links in the Chart menu were removed. So whether you are a registered user or someone engaged in the free trial, head over to our update page and download the latest version. The update page is here:   https://tradingstockalerts.com/software/downloadpatch Contact us if you have questions or identify any new issues.

Time to be conservative with your 401K

Most of the posts I and other financial bloggers write are typically focused on individual stocks or ETFs and managing active portfolios. For those folks who are more conservative investors, those whose main investment vehicle is a 401K, for example, the techniques for portfolio management might be a little different. The news of stock markets falling and pundits predicting recession is disconcerting to professional investors as well as to those of us who are watching our balances in an IRA or 401K sag. What approach should the average 401K investor take? Let's assume that the investor is contributing on a regular basis to one of these retirement accounts. There are two questions that the investor needs to ask: 1. Should I stop putting the regular contribution into stocks? My feeling is that investors making regular contributions are being handed a present by the markets. Every week the market goes down, these investors are lowering their average cost. When markets reco...